Spotlight

Taking the inorganic route

Mindteck has resorted to acquisitions in its bid to establish a global presence. By Nikita Upadhyay

Mindteck delivers business and technology solutions to global corporations. Its software solutions and services include embedded systems, business applications consulting, enterprise consulting (SAP) and security, infrastructure and managed services. The company is listed on the Bombay Stock Exchange (BSE 517344). Mindteck is ISO 9001:2000, ISO 27001:2005 certified, and a SEI CMMI Level 5 company. It is also a provider of product development lifecycle services with experience in embedded systems development. Its technical capabilities lie in developing embedded software solutions for test and measurement equipment, semiconductor manufacturing, mobile, wireless, and medical equipment industries.

Embedded software development is one of the core areas of expertise at Mindteck. It regularly engages with many customers worldwide for embedded services and business applications services. Some of its large scale projects are being delivered using multiple engagement models.

It also offered a range of IT consulting services. Some of recent trends that the organization had specialized in were Zigbee, portal implementations, Payment Card Industry (PCI), SAP support and IT systems consolidation during M&A.

In February 2008, Infotech Consulting merged with Mindteck to become part of a global IT services business.

Pankaj Agarwal, MD and Group CEO, Mindteck stated, “We have grown Infotech from a one-man operation to a 260-person company over the last 12 years. Our revenue had been growing at an average of 90% year-on-year for the last few years. The company touched Rs 100 crore in sales last year.”

Global clientele

Mindteck’s customers consisted of Fortune 500 companies, multinationals as well as small and medium enterprises (SMEs) across various industries. It has a global presence with offices and development centers in India, the Middle East, US and Malaysia. Each of these development centers is well equipped with the latest technologies for enterprise-wide communication and networking, productivity, collaborative software engineering, and distributed project management. Long-term focus, trust and transparency formed the foundation of its relationship with clients.

The company’s client list included NetApp, MTI, Toshiba, Intel, Prudential and the American Bureau of Shipping among others.

“Ours is a client focused organization. We have a well-defined Global Delivery Model equipped with development and support capabilities. We specialize in embedded software and custom business applications development and focus on mastering pioneering technologies,” said Agarwal.

Some of the company’s multinational clients had expressed interest in doing business with it worldwide. The company has responded positively and began to provide varied services to its client across the globe.

It has recently expanded to Europe. Mindteck run its European operations from three countries—UK, Germany, and the Netherlands. It has also strengthened its US presence with seven offices, and APAC operations with two offices—in Singapore and Malaysia.

SAP consulting

The growing demand for SAP in the enterprise applications market created a need for SAP services. Mindteck offers a range of services in the SAP application space including implementation, application support and maintenance, upgrade and data archival.

It partners with SAP globally to provide solutions across the enterprise space. Agarwal added, “Our SAP consulting service is focused on helping customers optimally utilize solutions offered by the SAP suite of products. It extends to business solutions and applications like mySAP ERP, mySAP CRM, mySAP SRM, SAP APO and SAP BW.”

The company offers IT consulting services that included custom application development, application management, application re-engineering and independent testing services. At Mindteck, quality was dealt with utmost care and consequently it had become a way of life covering all processes, interactions and deliverables.

“When delivering IT consulting services, we take full advantage of world-class tools, repeatable methodologies and the onsite or offshore delivery model. We build solutions that develop into valuable assets making a permanent impact on the enterprise’s bottom line,” pointed out Agarwal.

Mindteck’s primary service offerings in enterprise consulting spread across significant areas that had an immediate and direct impact on the consumption and maintenance of enterprise systems.

Strategy adopted

Mindteck had raised funds through private equity for the implementation of its ‘Go Global’ strategy. On an objective basis the combined revenue of the company and its newly acquired four companies is estimated to be over $75 million. The companies in question were Infotech Consulting, Primetech Solutions, Mindteck UK and Mindteck Singapore.

The organization is planning to expand its sales force to add more clients. Acquisition was the major strategy being adopted by Mindteck for its growth and global presence.

“The focus of the organization which has led it towards success has been employees and access to the global market,” said Agarwal.

The company’s roadmap indicated further strengthening of business lines to offer end-to-end capabilities to the clientele, and to grow organically creating value for shareholders and investors. However, the organization is also actively looking out to acquire companies that would be a strategic fit for its growth plans and could add significant strengths to its service lines.

Mindteck also adopted customer-centric development and relationship management processes to nurture associations with customers.

ZigBee Alliance

Mindteck is a key member of the ZigBee alliance and claimed to be the only Indian IT solutions provider with the capability and experience of designing and developing ZigBee stack and applications. ZigBee is a reliable, cost-effective, low-power, wirelessly networked protocol based on an open global standard.

The organization was also an early ZigBee adopter and it has wide-ranging and full-cycle experiences in building the MAC and ZigBee compliant protocol stack.

Apart from ZigBee in the field automated meter reading, the company had aggressively worked on other applications that included lighting and access control, temperature and pressure sensing.

Acquisitions abound

Mindteck (India) recently announced the acquisitions of three more companies. The company completed the acquisition of Primates Solutions; a California based IT consulting company. It also acquired two of its associate companies; Mindteck UK based in London, UK and Mindteck Singapore, based in Singapore. The total value of these deals was pegged at $9.6 million.

The new investments were being used to fund current acquisitions, repay debt, and for future growth. Mindteck had paid $2.5 million for the acquisition of its Singapore associate; $1 million in cash and $1.5 million through a stock swap. The UK associate was acquired for $0.5 million, all through stock swap. Primetech Solutions was acquired for $6.6 million, all in stock swap.

“With every acquisition, Mindteck further strengthens its range of services in business applications consulting, security and infrastructure Management, SAP, and embedded systems globally. The organization is committed to delivering quality work for the best price,” said Agarwal.

Mindteck is growing and its ethical business practice form one of its core strengths. By next year, the company expected group turnover (including that of the four acquired companies) to be around $100 million.

nikita.upadhyay@expressindia.com